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Legislation, triggers and thresholds
Legislation and authority
What legislation applies to the control of mergers?
Merger control rules are included in Chapter 4 of the Competition Act. The act harmonised the national merger provisions with the EU Merger Regulation (139/2004) with only minor exceptions. The legislative preparatory works (88/2010) also state that the practice of the European courts and the European Commission’s guidelines can be used when assessing a merger in accordance with the act.
The government has also issued two merger control decrees covering:
•the calculation of turnover of parties to the concentration (1011/2011); and
•the obligation to notify a concentration (1012/2011) specifying, for example, the notification form and the information to be submitted.
What is the relevant authority?
The Finnish Competition and Consumer Authority (FCCA) enforces the legislation and has sole jurisdiction to assess mergers where the relevant thresholds set in the Competition Act are met, unless the concentration is under investigation by the European Commission. The power to prohibit a concentration based on the FCCA’s proposal is held by the Market Court.
In addition, the Competition Act includes some sector-specific regulation for concentrations in the employee pension insurance, pension funds and insurance fund sectors. Any concentration in these sectors must be notified to and approved by the Finnish Financial Supervisory Authority. No separate notification to the FCCA is required if the Financial Supervisory Authority has asked for the FCCA’s statement concerning the proposed merger and the FCCA has stated that no impediment to approval of the concentration exists. Thus, the competitive assessment in these sectors is also conducted by the FCCA.
Transactions caught and thresholds
Under what circumstances is a transaction caught by the legislation?
The definition of a ‘concentration’ covers:
•acquisition of control;
•acquisition of a business or a part thereof;
•creation of a joint venture performing all the functions of an autonomous economic unit on a lasting basis.
The definition is mostly in line with the definition of a ‘concentration’ employed in the EU Merger Regulation (139/2004) and is effectively applied in a similar fashion, although the FCCA retains some case-specific discretion. Some differences to the EU Merger Regulation also exist – for example, there is no specific exemption for ‘warehousing structures’. Internal arrangements within a group of companies that do not amount to a change of control need not be notified.
Do thresholds apply to determine when a transaction is caught by the legislation?
Yes. A concentration must be notified where the aggregate worldwide turnover of the parties exceeds €350 million and the turnover of each of at least two of the parties accrued from Finland exceeds €20 million. The relevant turnovers are based on the company’s last financial statements. Special rules apply to calculating the turnover of investment companies, credit institutions and other financial institutions.
Is it possible to seek informal guidance from the authority on a possible merger from either a jurisdictional or a substantive perspective?
The FCCA is always open to pre-notification discussions regarding jurisdiction, information to be submitted in the notification and substantive issues. Pre-notification discussions are recommended at least in more complex cases.
Are foreign-to-foreign mergers caught by the regime? Is a ‘local impact’ test applicable under the legislation?
The Competition Act does not treat foreign-to-foreign transactions differently and there is no local impact test.
What types of joint venture are caught by the legislation?
The creation of a joint venture that carries out all functions of an autonomous economic unit on a lasting basis falls within the scope of the definition of a concentration. Non-full-function joint ventures do not constitute a concentration and are not subject to notification.
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